NDAA negotiations spill into public view — Hagel says he’s not worried about losing his job

NDAA NEGOTIATIONS OVER TROOP BENEFITS SPILL INTO PUBLIC VIEW: Senate Armed Services Republicans are siding with their Democratic chairman, Carl Levin of Michigan, in a dispute with Levin’s House Republican counterpart, Buck McKeon of California, over troop benefits. The stakes are high: The two retiring Armed Services chairmen are crafting an informal conference report to get their final National Defense Authorization Act passed by year’s end — as has been the case for the annual defense policy bill for more than half a century. But they’re deadlocked over a benefits dispute that has spilled into public view — a rarity for NDAA conference negotiations that normally take place behind the scenes.

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The fight has sparked a flurry of lobbying by the powerful Military Officers Association of America, which sent letters to all House members thanking them for holding the line on troop benefits. The House version of the bill, championed by McKeon, rejects Pentagon-proposed provisions to increase Tricare pharmacy copays and to reduce housing benefits. But Levin is insisting on the provisions being in the final, compromise bill — saying the Pentagon must be allowed to rein in its personnel costs in the face of sharp spending cuts. In an interview with Morning D, MOAA Director of Government Relations Michael Hayden vowed “to keep the pressure on until we see what the final outcome is.”

Despite MOAA’s lobbying, top SASC Republicans are backing Levin, including Lindsey Graham of South Carolina and John McCain of Arizona — two of the most vocal critics of a cut to military pensions that was signed into law late last year and then rolled back earlier this year after MOAA and other advocacy groups balked. SASC top Republican Jim Inhofe of Oklahoma is also siding with Levin, according to POLITICO’s Jeremy Herb, who was first to report on the benefits dispute. His latest story is here: http://politico.pro/1F4ZRiq

This is the latest development in a long-running saga over troop benefits, which the Defense Department has been pushing to scale back because, military leaders say, the department’s personnel costs are growing at an unsustainable pace — and the Pentagon is desperate for savings as it grapples with the current federal budget caps. But advocacy groups for troops and veterans have lobbied hard to stave off any reductions in benefits, saying those who’ve sacrificed for their country shouldn’t be asked to forfeit even a small portion of what they were promised. The fiscal 2013 NDAA established a military compensation commission that’s expected to put forward recommendations in February for reining in military personnel and retirement costs — recommendations that could provide lawmakers some cover to tackle the issue in the upcoming fiscal 2016 NDAA.

HAPPY THURSDAY AND WELCOME TO MORNING DEFENSE, where we’re wishing a happy birthday to Vice President Joe Biden and former U.S. Ambassador to the U.N. John Bolton. Keep the tips and pitches coming to at awright@politico.com, and follow us on Twitter @ abwrig, @ morningdefense and @ politicopro.

HAPPENING TODAY: The Senate Intelligence Committee meets at 2:30 p.m. on the nomination of Nicholas Rasmussen to be the director of the National Counterterrorism Center. And Army Secretary John McHugh hosts the Senior Army Civilian Army Profession Symposium at the National Defense University in Washington.

HAGEL SAYS HE’S NOT WORRIED ABOUT LOSING HIS JOB: Defense Secretary Chuck Hagel sat for an hour-long interview yesterday in his Pentagon office with Charlie Rose in which he addressed speculation about an Obama Cabinet shakeup. "I don't get up in the morning and worry about my job," Hagel said. The Pentagon chief also said he expected Russian President Vladimir Putin to continue challenging the West. He “just doesn't accept a world order as it is,” Hagel explained. More here: http://cbsn.ws/1zFx293

EXCLUSIVE — AIA'S BLAKEY SAYS RENEWED ANTI-SEQUESTER PUSH WILL EMPHASIZE THREATS: The head of the defense industry’s top trade association is pledging a renewed effort to thwart sequestration in fiscal 2016, this time with more emphasis on potential security threats. “The broader, formidable near-peer adversaries are not standing still, and they’re not being friendly,” Marion Blakey, president and CEO of the Aerospace Industries Association, told Morning D at the Reagan National Defense Forum in Simi Valley, Calif. Here are some edited excerpts from the interview:

What will AIA’s strategy be ahead of the fiscal 2016 sequester? We plan to go all out because we firmly believe the sequester is undermining not only our national security but our economic interests in this country. … We also believe that there are different elements now than there were when the decision was made.

What are those new elements? First and foremost, the national security threat is significantly changed. … We’re urging that [lawmakers] take into account the near-peer problems out there — China and Russia. We weren’t talking about that just a few years ago.

So the new campaign will be emphasizing threats more? Emphasizing the national security liabilities. We’re not going to be going out there with high-decibel, hysterical fear-mongering, not at all. But we are going to be talking about the fact that to address both the contemporaneous and very real problems between ISIL, Ebola, our problems in Iraq and Afghanistan, and then looking at the fact that the broader, formidable near-peer adversaries are not standing still, and they’re not being friendly.

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A FEW TAKEAWAYS FROM YESTERDAY’S DEFENSE ONE SUMMIT:

— The Pentagon's spending request for fiscal 2016 will far exceed what's allowed under the Budget Control Act caps — making another sequester more likely. “We need additional top line [funds] for the emerging new requirements,” said Joint Chiefs Chairman Gen. Martin Dempsey, as Defense News reports. http://bit.ly/1yUfyoC

— Pentagon leaders continue to set expectations for a lengthy effort to combat the Islamic State of Iraq and the Levant. In fact, Undersecretary of Defense for Intelligence Michael Vickers said it could be four years or more before moderate Syrian forces begin having a big impact, as POLITICO’s Philip Ewing reports.

— There’s increasing pessimism for congressional action to authorize the war against ISIL. Democratic Sen. Tim Kaine of Virginia and Democratic Rep. Adam Schiff of California renewed their calls of a use-of-force authorization during the lame-duck session but acknowledged there was a tough road ahead, as POLITICO’s Jen Judson reports.

CIA CONSIDERS BIG ORGANIZATIONAL CHANGES, via Greg Miller of The Washington Post: “CIA Director John Brennan is considering sweeping organizational changes that could include breaking up the separate spying and analysis divisions that have been in place for decades to create hybrid units focused on individual regions and threats to U.S. security, current and former U.S. intelligence officials said.

“The proposal would essentially replicate the structure of the CIA’s Counterterrorism Center and other similar entities in the agency — an idea that reflects the CTC’s expanded role and influence since the Sept. 11, 2001 attacks. … If Brennan moves forward, officials said, the changes would be among the most ambitious in CIA history — potentially creating individual centers focused on China, Latin America and other regions or issues for which personnel are now dispersed across [different] parts of the agency.” http://wapo.st/1xQPJXd

INDUSTRY INTEL — BOEING, AIR FORCE TO SET NEW TANKER SCHEDULE IN FEBRUARY, via POLITICO’s Philip Ewing: “Boeing and the Air Force want to establish a new test and delivery schedule for the KC-46A Pegasus tanker in February, a top acquisitions leader told reporters [yesterday]. Lt. Gen. Ellen Pawlikowski, a top Air Force weapons-buyer, acknowledged Boeing had encountered ‘challenges’ with the tanker program, described as one of the Air Force’s top priorities. That means pushing back the timetable by which it can hit its next milestones. Boeing hopes to fly its ‘prototype’ aircraft by the end of December, Pawlikowski said, and adjust its schedule accordingly.”

MAKING MOVES — BUSCH TAPPED TO RUN DLA: Air Force Lt. Gen. Andrew Busch has been nominated to be director of the Defense Logistics Agency at Fort Belvoir in Virginia. He’s now vice commander of Air Force Materiel Command at Wright-Patterson Air Force Base in Ohio.

SPEED READ

— The Air Force is considering a "family of systems" for its new sixth-generation fighter jet. POLITICO Pro: http://politico.pro/1F5awtu

— An Air Force official says she's "pretty optimistic" SpaceX will eventually be certified to launch military satellites. Reuters: http://reut.rs/1F1M7D2

— Emil Michael, the Uber executive under fire for remarks suggesting the company dig up dirt on critical journalists, has ties to the Pentagon. Washington Business Journal: http://goo.gl/28Y6DB

— Israelis retaliate a day after worshippers in a synagogue complex are murdered by two Palestinians. The Washington Post: http://wapo.st/14NfLBe

— Europe faces multiple national security threats, but it has yet to increase defense spending and relies heavily in NATO. McClatchy: http://goo.gl/hyojrE

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About The Author

Austin Wright is a senior defense reporter based at the Pentagon covering budget, policy and national security issues. He has been with POLITICO since 2011 and was previously a web producer and author of the widely read newsletter Morning Defense.

Before POLITICO, Wright worked for National Defense magazine, interned at The Chronicle of Higher Education and taught sixth-grade English at Kramer Middle School in Washington.

Wright hails from Richmond, Va., and graduated in 2009 from the College of William and Mary, where he was editor of the student newspaper, The Flat Hat. He lives in Northern Virginia with his wife, Leanne, and their dog, Kernel.